CSL Limited (ASX: CSL) shares have surged 54% higher in the last 12 months. Despite coronavirus concerns hitting share prices hard, CSL shares are still outperforming.
The Aussie biotechnology group's $138 billion market capitalisation also makes it the largest constituent of the S&P/ASX 200 Index (ASX: XJO) right now. But what's going on with CSL shares right now and should you be buying in 2020?
Why CSL shares are up 54% in the last 12 months
CSL researches, develops, manufactures and markets products to treat and prevent serious human medical conditions. If you think that sounds very broad, it's because the company does a lot of things.
From managing blood donations to developing vaccines to treating rare and serious diseases, CSL is a big player in the biotechnology game. CSL shares just broke the $300 barrier again and closed at $304.11 on Friday. That means the group's shares have climbed nearly 40,000% higher from its stock-split-adjusted IPO price of $0.76 in 1994.
There's no doubt CSL is an ASX blue-chip and I think it could be a good buy right now. A strong research and development pipeline supports the group's existing activities and provides a large moat around its business. That means CSL has a strong competitive advantage and a unique position in a lucrative market.
CSL has also proven to be resilient despite the current bear market. While the S&P/ASX 200 Index is down 24.19% since the start of the year, CSL shares are up 10.28% in 2020. The combination of strong upside growth and defensive qualities is pretty powerful in the current conditions.
One other thing that I think makes CSL a buy is its lack of dividends. Normally when we see a market correction hit, dividend-paying shares outperform. Investors like the security that cash in hand provides versus banking on potential growth. However, given the nature of COVID-19, many ASX dividend shares will potentially keep that money for balance sheet security.
In contrast, CSL shares only yield 0.96% per annum. Provided CSL continues to produce strong results and the pipeline projects keep ticking over, it looks to be a good buy at the moment for security and long-term growth.
